Monday, November 13, 2006

Profitable Experiences

Is the tail wagging the dog?

A recent article by Martha Rogers of 1to1 fame discussed the benefits of Continental Airlines' loyalty program. In it there is the following:
Each customer has an associated customer value metric, from one to 100, based on the profitability of that passenger. By treating different customers differently based on their value, Continental gives each group the experience its members are looking for.
But here's the rub, the experience people look for may only loosely relate to their profitability. Certainly experiences have costs and aligning the rewards and perks with value is an appropriate goal. The trick is to figure out how to make the desired experience profitable and not the other way around.

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